Screen a securities offer for an untrue statement or a misleading omission
Key facts
- Human involvement
- YellowClose supervision
- How AI is used
- From the offer or sale communication, quote each statement of fact about the security, record any fact the file shows was omitted, and record whether the file describes consideration paid for a communication that describes the security without purporting to offer it. Do not decide that a statement is untrue or that an omission is material.
- What the lawyer must review
- The lawyer applies 15 USC 77q, section 17 of the Securities Act. In the offer or sale of any securities, or any security-based swap agreement as the section defines it, by the use of interstate commerce or the mails, it is unlawful, directly or indirectly, to employ any device, scheme, or artifice to defraud; to obtain money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser. Subsection (b) makes it unlawful to publish or circulate a notice, circular, advertisement, newspaper, article, letter, investment service, or communication which, though not purporting to offer a security for sale, describes the security for a consideration received or to be received from an issuer, underwriter, or dealer, without fully disclosing the receipt, whether past or prospective, and the amount. Subsection (c) says the exemptions in section 77c do not apply to this section. The GovInfo 2023 edition contains the same subsections (a), (b), and (c).
- Written for / version
- United States versionUS
Who does what
| Role | What they do |
|---|---|
| Assistance | Do not begin AI assistance until the responsible lawyer has defined and confirmed its permitted scope. |
| Lawyer | Set the scope, supervise the work closely, verify every part relied on, resolve omissions and exceptions, and approve the exact output. |
Checklist
- Review operative clauses in the complete document, including definitions, cross-references, schedules and inconsistencies with the instructions.
- Review the original source set for relevant material absent from the output, including contrary evidence, qualifications and remaining gaps.
- Confirm the output against the client’s instructions and the complete relevant source material, including omissions or contradictions.
- Resolve exceptions and record the responsible lawyer’s approval of the exact output and intended use.